August 9, 2006 4:00 AM PDT

Broadband bundles to drive wireless spectrum sale

(continued from previous page)

The strategy has worked well so far, with both Verizon and AT&T admitting during their second-quarter conference calls that the cable bundle had affected their voice businesses.

Wireless services could become an important fourth element in the cable operators' service package. But more important, cable companies see wireless services as a way to differentiate their existing offerings, by adding products that complement the services they offer today. For example, customers may use a wireless network to remotely program their digital video recorders or to take their wireless broadband service with them on the road.

Cable operators bidding in this latest auction have already indicated their interest in wireless. Last November, Comcast, Time Warner, Cox Communications and Advance/Newhouse Communications announced a joint venture with Sprint Nextel to offer cable customers a bundled wireless telephone service. Now these same companies are joining forces with Sprint to bid on additional spectrum.

While Sprint already owns a large amount of spectrum, particularly in the 2.5GHz band, the cable operators are dependent on Sprint as part of the joint venture to allow them access to its network. Bidding on spectrum themselves will give them some control over the underlying infrastructure, say some analysts.

"The cable companies are bidding so that they have an ace in the sleeve if the joint venture goes badly down the road," said Roger Entner, a telecommunications analyst at Ovum Research.

The auction is also crucial for satellite providers, such as EchoStar and DirecTV. Right now satellite companies offer TV service, and they partner with phone companies to deliver broadband. Because they don't own a terrestrial network, it's difficult for satellite providers to offer broadband services that can compete in terms of speed as well as price with cable companies.

As phone companies deploy more fiber into their networks and offer their own television services, they could dissolve their relationship with satellite providers. For this reason, some analysts believe that satellite providers may actually be in greater need of wireless spectrum than the cable companies.

"I think the satellite companies are limited in what they can offer consumers," IDC's Lind said. "They have partnerships with DSL providers, but now that AT&T is putting fiber deeper into the network, they could cut them off. Satellite needs to have some stake in the ground to provide their own broadband service."

The new spectrum licenses could allow satellite providers to offer competitive broadband services using a technology such as WiMax, which is able to deliver at least 2mbps to 4mbps of download capacity. Although it wouldn't be comparable to fixed-line broadband services from DSL providers or cable operators, it would be a start.

If cable operators and satellite providers miss out this time around in the spectrum auction, they'll at least have another opportunity to bid on a different band of spectrum that's expected to come up for auction in 2008.

The FCC is required to start auctioning the remaining unsold spectrum in the 700MHz band of spectrum by Jan. 28, 2008, under the Digital Television and Public Safety Act of 2005. Originally, the 700MHz spectrum was occupied by UHF or analog TV channels 52 through 69 (698MHz-806MHz). But it has been reallocated for use for other communications services.

In the first round of auctions for the 700MHz licenses, Aloha Partners and Qualcomm won the majority of the available licenses. Aloha Partners plans to use the spectrum for fixed and mobile broadband Internet services. Meanwhile, Qualcomm is using its licenses to build its MediaFLO, which will provide a wholesale mobile video network for cellular phone companies.

The 700MHz spectrum is attractive for wireless broadband operators because it can travel longer distances and penetrate walls. And because signals can transmit farther, less equipment is needed to build the network, which greatly reduces the cost of the network.

Because wireless spectrum is a fixed commodity, it's very important for players wishing to get into the game to make their moves when spectrum is available, Entner said.

"If a company doesn't win licenses in this auction, they better win some in the 700MHz spectrum auction," he said. "Spectrum is like money, you can never have too much of it. It's also a limited resource, so once it's gone, that's it."

Previous page
Page 1 | 2

See more CNET content tagged:
spectrum, cable company, satellite company, Time Warner Inc., satellite


Join the conversation!
Add your comment
SWANsat to Turn Earth into Wi-Fi Hotspot
Would SWANsat buy FCC licences if they hav one already?

Imagine a series of at least three geosynchronous orbital satellites providing wireless Internet access to the entire world. Thats exactly what a project called SWANsat or Super-Wide Area Network Satellite plans to do by the year 2011. They intend to be a global broadband Internet service provider that can facilitate up to 600 million connections per satellite. All you need is a handheld mobile device to connect to the system.
Read more: HYPERLINK <a class="jive-link-external" href="" target="_newWindow"></a>

IOSTAR, SANDIA LABS, ORBITAL. The pioneers of GPS &#38; Teledesic  together with directors such as 4 Star General Tony McPeak &#38; former secretary of US Air Force (Roche) and former Branch Chief of guided missiles &#38; CEO of Western Digital  are coming together for intriguing development called SWANsat.

The Teledesic Chief Architect (now Presidnet of IOSTAR) recently made this presentation:
HYPERLINK <a class="jive-link-external" href="" target="_newWindow"></a> (intro-nav page)
HYPERLINK <a class="jive-link-external" href="" target="_newWindow"></a>
Posted by swansat_kaching (20 comments )
Reply Link Flag
Online auctions
How long are we going to be doing this? When will the economies of scale and online auctions in reverse be used for these things? Why people always have to pay more? <a class="jive-link-external" href="" target="_newWindow"></a> is the correct reverse way to go.
Posted by solisy (1 comment )
Reply Link Flag
Google will be there says: Jean-Pierre Khoueiri of Constant Click
These licenses are expected to generate over $15 billion in
revenues, you can bet that companies like Google are going to be
bidding on some of these.
Posted by (5 comments )
Reply Link Flag
Thanks for the great article.
Posted by mikefurl (2 comments )
Reply Link Flag

Join the conversation

Add your comment

The posting of advertisements, profanity, or personal attacks is prohibited. Click here to review our Terms of Use.

What's Hot



RSS Feeds

Add headlines from CNET News to your homepage or feedreader.